Capital Market Can Propel Nigeria To N1trn Economy – SEC

According to the Director General of SEC, Dr Emomotimi Agama, the Capital Market is the engine that drives economic progress by channeling resources from savers to those who need capital for productive use.

Dr Agama, who spoke at the 2024 SEC Journalists Academy programme for capital market correspondents in Lagos, said; “Achieving a N1 trillion economy is not merely an aspirational goal; it is a necessity for the prosperity and resilience of Nigeria and that the capital market, as the financial backbone of our economy, is poised to drive this transformation.

“However, the journey demands collective effort from policymakers ensuring an enabling environment, to businesses leveraging market opportunities, and, importantly, to journalists who communicate the market’s value to the broader public.

“Globally, countries that have achieved economic milestones, whether in industrialisation, infrastructure, or innovation, have relied heavily on the capital market to mobilise and allocate resources efficiently.

“In Nigeria, this reality holds immense potential. With the right policies, frameworks, and investor confidence, the capital market can transform into a formidable force for financing the aspirations of our economy”.

Agama further stated that a significant pathway to economic transformation lies in financing critical national projects, especially in infrastructure, adding; “Nigeria has already demonstrated how the capital market can fund these needs through innovative instruments like sovereign bonds and a number of Sukuk.

“For example, the federal government has raised significant capital by issuing six Sukuk to fund road projects across the six geopolitical zones. This innovative funding approach reduced the reliance on external borrowing while driving job creation, improved logistics, and regional integration.

“The issuance of green bonds has further cemented the role of the capital market in supporting Nigeria’s transition to a low-carbon economy, addressing both infrastructure and environmental sustainability”.

Agama, who was represented by the Head of Lagos Office of the Commission, Mr John Abel Briggs, said beyond government financing, the capital market is a vital enabler of private sector growth as companies in Nigeria have utilised the market to raise capital, expand operations, and compete globally.

Hear him; “A prime example is MTN Nigeria, whose public offering in 2021 attracted significant local investor participation, broadening its shareholder base while showcasing the strength of our market.

“Additionally, the listing of firms like Dangote Cement and BUA Group underscores how the capital market supports industrial growth and job creation.

“Today, the total market capitalisation of the Nigerian Exchange Limited stood at N60 trillion by 13th December 2024, a testament to the growing role of the private sector in driving national economic outcomes.

“One of the most remarkable opportunities within the capital market is its ability to democratise wealth creation. Through vehicles like collective investment schemes (CIS), retail bonds, and exchange-traded funds (ETFs), the market provides access to financial products for Nigerians across income levels.

“For instance, in recent years, we have seen the rise of the retail bond market, enabling ordinary Nigerians to participate in the nation’s economic growth.

“The Federal Government introduced the Savings Bond in a bid to expand the retail investor base in the bond markets and this has been well received by investors in recent times.

“The introduction of fintech platforms has further simplified access to investment opportunities, driving financial literacy and inclusion. Today, numerous retail investors actively participate in the Nigerian capital market—and we are committed to growing this participation”, he added.

The role of the capital market also extends to state governments, offering a sustainable avenue for financing projects. “Sub-nationals like Lagos and Ogun states, among others, have leveraged bond issuances to fund infrastructure, education, and healthcare projects.

“These bonds not only enable states to execute developmental projects but also foster accountability and transparency, as market discipline demands robust reporting and monitoring mechanisms.

“Expanding this model across more states could unlock development at unprecedented scales, especially when paired with public-private partnerships”, he stressed

However, the SEC boss said these successes notwithstanding,  challenges remain as limited investors’ participation, regulatory bottlenecks, and macroeconomic uncertainties often constrain the capital market’s full potential.

Significantly, he said; “Through concerted efforts by stakeholders, including the Securities and Exchange Commission (SEC), market operators, and policymakers, we are laying the foundation for an inclusive, efficient, and globally competitive capital market.

“Initiatives like improving market liquidity, simplifying listing requirements, and fostering innovation through fintech solutions are vital to building confidence and attracting both local and foreign investors”.